Dependent States in 1994

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and the Atlantic

Relations between Spain and the U.K. continued strained in 1994 as the two countries commemorated 10 years of attempted negotiations over the future status of Gibraltar. While Gibraltar Chief Minister Joe Bossano sought greater autonomy under British rule and eventual independence, Madrid demanded the colony’s return to Spanish sovereignty under the terms of the 1713 Treaty of Utrecht, which ceded Gibraltar to Britain only as long as it remained a dependency. In June Spain issued a formal protest against alleged drug smuggling through Gibraltar. Late in the year Spain set up double checkpoints at the border, but these were lifted in late December when Britain agreed to joint measures against illegal trafficking.

Talks between the U.K. and Argentina over the disputed Falkland Islands/Islas Malvinas also showed little progress, although general relations improved. Fishing rights remained the most immediate issue, but the potential revenue from offshore oil reserves was also at stake. Islanders accepted an offer from Buenos Aires for help with disposal of land mines left behind after the 1982 Falkland Islands war. In October the Argentine government reportedly offered as much as $1.5 million to each Falkland Islands resident in exchange for repudiation of British citizenship. In November Argentine Pres. Carlos Menem’s brother and the Duke of York, who served in the British navy during the war, exchanged official visits.

In the Faeroe Islands the opposition Union Party increased its share in the 32-seat Lagting (parliament) to 8 seats in the general election on July 7 and took over at the head of a four-party coalition. Edmund Joensen was sworn in as prime minister on September 15. The Faeroes authorized seismic studies to search for offshore oil in 1994. It was hoped that new oil discoveries could help the islands’ economy, which had been hit hard by overfishing, the lowering of fish prices, and austerity measures imposed by Denmark in exchange for increased aid.

Anguilla gained new leadership in March 1994 when Hubert Hughes, the former opposition leader, was sworn in as head of a coalition government after the general election that month failed to produce a majority for any party. Hughes had led the Anguilla United Party in the election.

A new government took office also in Aruba following the general election in July. It was headed by Prime Minister Henny Eman of the Aruba People’s Party (AVP), which won 10 of the 21 seats. The Aruban Liberal Organization, which obtained two seats, joined the AVP to give it a working majority.

In the Netherlands Antilles, Miguel Pourier of Curaçao was sworn in as federal prime minister on March 31. Pourier’s Antillean Restructuring Party, which had won a majority in the February election, dominated the coalition. The new administration said at midyear that it would set up a fiscal fraud squad to combat tax evasion and other financial crimes. This followed the jailing of the leader of the St. Maarten’s Democratic Party, Claude Wathey, for perjury and forgery in connection with expansion schemes at the international airport. In June the island governments on Curaçao and St. Maartens both collapsed. New lieutenant governors were appointed, effective from September 1. In October Bonaire, Saba, St. Eustatius, and St. Maartens followed Curaçao’s example and voted to remain within the Netherlands Antilles federation.

It was confirmed during the year that both the foreign military installations in Bermuda would be closed, which posed a major threat to the economy. The British navy yard was to cease operations in April 1995, only five months before the U.S. government was due to withdraw funding from its naval air station. The Bermuda House of Assembly in May passed a motion rejecting a government proposal for a commission of inquiry into the issue of independence from Britain. This put a brake on the independence momentum for the time being.

The U.K. announced in March that it would enlarge the British Virgin Islands Legislative Council for the next election in February 1995, adding four new seats to the existing nine, to be voted for on a nonconstituency basis. Chief Minister Lavity Stoutt protested the lack of "consultation" with his government over the plan. In the Cayman Islands in February, constitutional changes came into effect under which executive council members became ministers, but there was no provision for a chief minister to be de facto head of government. Later in the year the Caymans sought British help in dealing with increasing numbers of Cuban refugees.

Guadeloupe was declared a disaster zone at the end of August following the worst drought in 30 years. The drought took a severe toll on the island’s vital sugar and banana industries. The declaration would enable farmers to receive extensive financial assistance. Puerto Rico also announced a $2.4 billion water-development program to combat a severe shortage there. The program would be spread over seven years.

Pacific

Early in the year, Pres. François Mitterrand confirmed that France would undertake no further nuclear testing during his term of office. While the suspension of testing was welcomed by Pacific Islands leaders, it had serious implications for the economy of French Polynesia, where gross domestic product had dropped by 28%, the number of army personnel based on Mururoa had been halved to about 1,000, and army spending was down by 40%. The French government agreed to make compensatory payments of $118 million a year. There was tension between the territorial president, Gaston Flosse, and the French high commissioner in July when the latter boycotted anniversary celebrations of a decade of autonomy because the local flag and anthem were given precedence over the French national symbols. A major strike affecting fuel supplies seriously disrupted the economy in October.

In New Caledonia there was growing evidence that political parties across the spectrum favoured a negotiated constitutional settlement in 1998 rather than a simple referendum on independence. Despite these suggestions of accommodation political sparring continued, with anti-independence leader Jacques Lafleur being severely critical of financial arrangements for a ferry service run by the pro-independence Loyalty Islands provincial government.

In a March general election in the Cook Islands, the Cook Islands Party led by Sir Geoffrey Henry was returned to power in a landslide, winning 20 of the 25 seats in the Legislative Assembly. Voters also endorsed the status quo on the territory’s name, national anthem, and flag. Henry’s victory was achieved despite continuing controversy over a major tourist hotel development, which had suffered from serious financial and management difficulties, and from allegations that the tax-haven facilities of the Cook Islands had been misused to disguise mismanagement and tax evasion by New Zealand companies. Meanwhile, Niue legislated to provide a tax haven, though on a more modest scale. Niue, which had a resident population of 2,300 (with 14,400 Niueans living in New Zealand), hoped to make some $NZ 4 million a year to replace some New Zealand aid.

The most significant development in the U.S. Pacific dependencies was the independence of Palau following a referendum that allowed the Compact of Free Association to override Palau’s antinuclear constitution. (See Palau, below.) Early in the year the U.S. passed legislation to allow the return to the Guam government of some 1,295 ha (3,200 ac) held by the federal government. The move was the first step toward the return of much larger holdings once the U.S. military bases on the island closed from April 1995. In the Northern Mariana Islands, the election of Democratic Gov. Froilan C. Tenorio brought early controversy when he instigated reforms to the local garment industry that depended on low-paid migrant labour, mostly from the Philippines. He also signaled a hiring freeze on government positions, measures to secure compliance with taxes and regulations, and checks on the misuse of government resources.

East Asia

Tension between the U.K. and China over Hong Kong grew worse in 1994. In June electoral reforms proposed by London-appointed Hong Kong Gov. Chris Patten two years earlier were passed 32-24 by the territory’s Legislative Council. The measures included lowering the voting age to 18 and widening the franchise in legislative elections for "functional constituencies" based on professional groups. In response, China said that once it assumed sovereignty over Hong Kong in 1997, it would dismantle the three tiers of councils and hold new polls, thus abandoning the "through-train" concept by which those elected before 1997 would serve afterward. The Beijing (Peking)-appointed Preliminary Working Committee (PWC), set up to give advice on Hong Kong’s post-1997 institutions, took a more prominent role. In December the PWC announced that China would appoint a provisional legislature to govern Hong Kong through the transition for up to a year.

The first elections under Patten’s reformed system were held for neighbourhood-level district boards in September. Parties described as "pro-democracy" won 30% of the seats, compared with 19% for "pro-China" groupings. About half the posts went to independents.

In a speech in October, Patten said Britain and Hong Kong wanted to cooperate with China, but he continued to forbid formal contacts between civil servants and the PWC. He also proposed an ambitious but controversial social program that would increase spending on the elderly, the disabled, education, and housing.

In November China and Britain finally agreed on the financing of a new airport and connecting railway, already under construction. The Hong Kong government was to provide at least $7.7 billion in equity and borrow $3 billion to pay for the projects. Economic growth remained above 5%, while inflation stood just below 10%.

In September Macau Gov. Vasco Rocha Vieira paid an official visit to Beijing and won its agreement not to impose the death penalty in the Portuguese-run territory after it reverted to Chinese sovereignty in December 1999. In anticipation of completion of the territory’s first airport in mid-1995, a Macau-based regional airline was set up.